US to Allow BP to Bid on New Oil Drilling Leases in Gulf

WASHINGTON (Dow Jones Newswires), Oct. 13, 2011

The U.S. has decided to allow BP to bid on new oil-drilling leases that go up for sale in the Gulf of Mexico later this year, less than two years after BP's Macondo well erupted and caused the worst offshore oil spill in U.S. history.

While testifying at a House hearing Thursday, offshore safety chief Michael Bromwich said his agency "considered and thought about this issue quite a lot," but eventually determined to allow the British oil giant to bid for leases in an upcoming auction known as Lease Sale 218.

"We don't think it's appropriate [to exclude BP] in these circumstances," said Bromwich, director of the Interior Department's Bureau of Safety and Environmental Enforcement.

On Wednesday, the Interior Department issued its first set of citations related to the spill at the Deepwater Horizon rig, accusing BP and two of its contractors of breaking several rules. The citations are likely to carry fines.

Scheduled for Dec. 14 in New Orleans, the upcoming lease auction will involve leases in the western Gulf of Mexico. The leases cover about 21 million acres, in water depths of up to 11,000 feet. It will be the first lease auction since the Deepwater Horizon spill.

The Interior Department said production on the available leases could reach 420 million barrels of oil and 2.7 trillion cubic feet of natural gas.

Copyright (c) 2011 Dow Jones & Company, Inc.


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